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File #: 091397    Version:
Type: Resolution Status: Passed
File created: 2/9/2010 In control: FINANCE & PERSONNEL COMMITTEE
On agenda: Final action: 3/2/2010
Effective date:    
Title: Substitute resolution authorizing $16,805,000 of contingent borrowing for Redevelopment Purposes.
Sponsors: ALD. MURPHY
Indexes: CONTINGENT FUND, GENERAL OBLIGATION BONDS, MUNICIPAL BORROWING, REDEVELOPMENT AUTHORITY
Attachments: 1. Proposed Substitute A, 2. Cover Letter, 3. Fiscal Note, 4. Hearing Notice List
Number
091397
Version
Substitute 2
Reference
091023, 091024, 091398
Sponsor
ALD. MURPHY
Title
Substitute resolution authorizing $16,805,000 of contingent borrowing for Redevelopment Purposes.
Analysis
In 2002, the Redevelopment Authority of the City of Milwaukee (RACM) issued bonds to build a parking garage for Cathedral Place. The RACM Bonds are secured by a Letter of Credit. Due to the financial turmoil, the Letter of Credit is no longer available. The RACM Bonds have a moral obligation pledge of the City. This file would allow the RACM Bonds to be refunded by City General Obligation Debt.

Body
Whereas, In 2002, the Redevelopment Authority of the City of Milwaukee (the “RACM”) issued debt (the “2002 Bonds”) to finance the Cathedral Place Parking Facility Project for Tax Incremental District #49 of the City; and

Whereas, The City has provided a Moral Obligation Pledge for the 2002 Bonds to replenish the Debt Service Reserve Fund securing the 2002 Bonds; and

Whereas, The 2002 Bonds are currently outstanding as variable rate bonds secured by a Letter of Credit provided JPMorgan Chase Bank, N.A. (the “Bank”) that expires in May, 2010, and the Bank has informed RACM that they will not be renewing the Letter of Credit pursuant to the existing terms; and

Whereas, The Bank has offered a Letter of Credit at a substantially higher cost if the City provides a legally enforceable full reimbursement of draws under the Letter of Credit, not just a moral obligation pledge to replenish the Debt Service Reserve Fund; and

Whereas, It is desirous for the City to provide additional security for the Letter of Credit by authorizing general obligation borrowing to provide funding for a legally enforceable obligation of the City to reimburse, in full, draws under the Letter of Credit; and

Whereas, The 2010 Budget of the City includes $150,000,000 of Contingent Borrowing for purposes not contemplated at the time of the adoption of the 2010 Budget, and desires to use $...

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